TD earnings: -11.7% in wealth management, +2.8% in insurance

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By Aurélia Morvan | Sept. 2, 2022, 5:10 p.m.

Photo: Freepik | pinnacleanimates

TD Bank Group (TD) reported net income of $3.2 billion ($B) for the third quarter of 2022, which ran from May 1 to July 31. This is down 9.3% or $331 million (M) from the $3.5 billion in net income reported in the third quarter of 2021.

Insurance and Wealth Management

For the domestic retail division alone, a segment that includes the insurance and wealth management business, the company reported net income of $2.2 billion in the third quarter of 2022, up from $2.1 billion in the third quarter of 2021. This is an increase of 6% or $128 million.

Two of the segment’s three sub-sectors grew:

Canadian personal and commercial banking: This segment reported net income of $1.7 billion in the third quarter of 2022, compared with $1.5 billion in the third quarter of 2021. This represents an increase of 11.6% or $175 million.
Insurance: This segment reported net income of $182 million in Q3 2022 compared to $177 million in Q3 2021. This is an increase of 2.8% or $5 million.

The wealth management segment reported net income of $393 million in Q3 2022 compared to $445 million in Q3 2021. This represents a decrease of 11.7% or $52 million.

Non-interest income

Overall non-interest income for the Canadian retail segment was $3.6 billion in the third quarter of 2022, compared with $3.5 billion in the third quarter of 2021.

The 1% or $37 million increase was due to higher fee-based account revenue in banking and higher volumes in insurance, partially offset by lower transaction and fee-based account revenue in wealth management and a decrease in the fair value of investments supporting insurance liabilities, which resulted in a corresponding decrease in insurance claims, says TD.

Insurance non-interest income alone was $1.4 billion in the third quarter of 2022, compared to $1.3 billion in the third quarter of 2021. This represents an increase of 7.1% or $93 million.

Claims

Insurance claims and related expenses reached $829 million in Q3 2022, compared to $836 million in Q3 2021. This represents a decline of 0.8% or $7 million, reflecting favourable prior year claims experience and the impact of a higher discount rate, which resulted in a corresponding decrease in the fair value of investments supporting insurance liabilities recorded in non-interest income, partially offset by higher claims experience in the current year, explains TD.